Affordable housing for low-income households through floor area ratio incentive: the case of Manohara settlement in Kathmandu, Nepal

ABSTRACT

The mismatch between the fast-growing urban population and limited urban infrastructure has become a challenge in many emerging cities. The lack of affordable housing leads to burgeoning informal settlements and Manohara informal settlement in Kathmandu is not an exception. This study aims to investigate the current situation in Manohara informal settlement and examine the feasibility of floor area ratio (FAR) incentive in providing affordable housing. A household survey in Manohara informal settlement and simulation analyses of FAR incentive found the followings. Firstly, given the limited budget and little control over the land of Kathmandu by the government, a planning tool focusing on development gain is a suitable option for housing provision for low-income households. Secondly, FAR incentive simulation of land size of 50,000 sq. ft. in Kathmandu shows that 50%p incentive allowance can add 33–93% extra profit to the developers in a housing project, which can be secured for affordable housing for public interest.

KEYWORDS:

• Affordable housing
• low-income households
• floor area ratio (FAR) incentive
• development gain
• planning tool
• condominium

Acknowledgement

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF2020S1A5C2A01092978).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The government is planning to provide land to the landless and formalise the informality from 2022. See more information at https://english.onlinekhabar.com/land-commission-assurance-landless.html.

2. https://www1.nyc.gov/site/planning/zoning/districts-tools/inclusionary-housing.page accessed on 2022.5.3.

3. See more at www.gharghaderi.com.

4. Kathmandu Valley Development Authority. 2007. Housing Bylaw 2064.

5. Nepalese Rupee, 1US$ = 122 NRs as of March 2020.

6. Although there is minimum land valuation book by the Land Revenue Office of Government of Nepal based on the local offices that collect revenue from land sales (Government of Nepal 2015b, 2016b, 2017b), but the it is underestimated.

7. This is from Soltimode inside Ring Road.

8. This is from Naikap, Bishnu Devi Mandir outside Ring Road.

Additional information

Notes on contributors

Prabhakar Lal Karn

Prabhakar Lal Karn is a senior engineer in the Ministry of Urban Development, Government of Nepal. With full scholarship by KOICA, he joined the master programme for Urban and Regional Development in International School of Urban Sciences in University of Seoul. After successful completion of the degree, he returned to his department and work for the redevelopment of residential area in Nepal. His major research interests covers affordable housing, redevelopment, resilence agains natural disaster, and sustainable architecture. [email protected]

Joon Park

Joon Park is an urban economist working mainly in the fields of land/urban economics, housing market analysis, spatial analysis, smart city, and international development. He worked as an associate research fellow in Korea Research Institute for Human Settlements (KRIHS) mainly engaging in projects of land, housing, and real estate policies. Major themes in his recent research have included the structure of land rents in an urban context; impacts of expansion of cities on house prices; urban structure and CO2 emissions; transformation of spatial housing submarkets; assisted self-help housing; sustainable urban development; and more broadly the application of land rent theory and spatial analysis to questions of the structure of cities. [email protected].